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payroll tax and late irs dragging their feet? >> some of the refunds late coming back. they said that started to stabilize less. still the gas and payroll taxes, still going to be an issue. let's get back to our guest host, howard malik and sarah ward for the last word. if you have to sum up everything we have heard from the fed, walmart, the rest of these things, what would be the word you leave our viewers? >> you want to use the volatility to find the companies strong free cash flow. like the auto stocks, toyota, emerging markets have been relative underperformers year to nate. buy dong fang motor, make 3 million cars in china every year, a company you can own to play the catch up trade in the emerging markets. >> howard? >> i agree with what sarah said. apple has couldn't come up 4.7
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times ebidta. apple is extremely cheap, the stock will be at $600 the next 18 months. buy it again. >> go back to 600. >> you care about all the proposition 2? >> yeah. >> i don't think it's critical >> i think it is a bit of a nuisance. this is a company that's made more money for shareholders in the last few years than the entire rest of the technology industry combined. give them a break. they didn't even have a dividend 12 months ago. >> right or wrong? >> i don't know if he's right or wrong. i think you have to give management a little bit more time. i think that we are going a little too hasty pushing them h i think they will do the right thing, return more cash to shareholders. no question about it. give them a chance. >> thank you, guys. >> take the foot off their throat. >> join us tomorrow. "squawk on the street" begins right now.
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good thursday morning, welcome to "squawk on the street." i'm carl quintanilla, melissa lee, jim cramer. faber is on assignment, he will interviewing me whitman tomorrow from hewlett-packard at this time. futures do suggest that yesterday's rocky ride is not quite over yet. jobless claims and cpi pretty mild a lot more data in an hour. eurozone pmis no good. further declines for february, red arrows there china drains a record amount of cash for the week from its banking system. after the second worst day of the year, is the selloff just beginning and is this the pause buy verse been begging for? we will turn to cramer for answers. >> consumers are finally start to spend now that the tax refund checks are coming in. why is the guide cans below forecasts? >> not one but two firms raise third price target on google, $1,000, we will talk to one of the analysts behind the call
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coming up. the tech giant toying with a chrome touch screen and trying to make its google glasses more stylish. >> david einhorn hosts a conference call with am shareholders at 2:00 eastern time. he is going to explain ourselves better regarding his high-profile proxy fight. >> we will start with the selloff. futures pointing to lower opening following the disappointing claim numbers a day after the worst one-day selloff of the year are markets around the globe feeling the pain too. europe shares sharply lower after uncertainty from the fed about the future of kiwi raises concerns, markets in london, germany, spain down 1%. asia down as well. shanghai down 3%. jim, you got sequester, you got fed, you got gas prices are, like they all converged in a matter of a couple days. >> you feel the switch has flipped, things going well is going badly. i want to caution the weakness of the month-old fed meetings
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notes is they are a month old. they see what we see. they don't wake up and say ignore gasoline and forget the sequester around the idea the world is somehow better -- no it's not. i would point out that the sequester chat iris going to grow and grow and grow. so every time you pick the paper up from now on until it happens, it is going to take your breath away. what happens for some of these, military, they are not close the golf courses, a great link. i was looking at all the great golf courses the military has. 800,000 civilians furloughing, that means spending power reduced with the payroll tax holiday. the scare tactics are going to be in and you got to steel yourself if you're going to stay longer. >> you call it a scare tactic, we are talking, some say 1 million jobs, half a point off the gdp. those are real numbers. >> scare tactics in the sense the fiscal cliff didn't develop exactly as we thought. entirely possible that a deal comes about. i keep thinking about all the capital gains, all the dividends
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that were accelerated because dividend tax rates were supposed to go up so much. dividend tax rates stayed like capital gains rates, up a little bit. i don't want to go overboard with what could happen. the scare stories about the military make me feel like we're putting our force fields down, our defense shields coming down. probably not going to be like that. >> even as both sides digged in their heels in terms of the republicans saying we are not going to get in on more tax increases, we gave that to you, mr. president, we hear that chatter, the markets will, in fact, be volatile. you think that until there is some resolution, that we will see -- >> i want to put things in context. i am less worried about spending cuts than i was about fiscal cliff, which i think fiscal cliff in a way if we did get the dividends up big and if we didn't -- did get a total break down, the alternative minimum tax went bad, i think you had much more to worry about. here, i think is there an undercurrent in this country the government spends too much. i think people want government spending cut.
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>> where do you stand on the fed, the minutes, that whine saying we will pull qe or vary the pace perhaps if there's a change in the economy or if it's seen that the efficacy and the costs don't warrant it anymore? h i think you see the jobless claims not being so great today and listen to the chatter. david cody, a reasonable guy, sequester going to knock big red -- chunk of our revenue up, you're the fed this is one of the months don't take the foot off the pedal. >> we'd debate whether or not the minutes caused the selloff. took half an hour before the acceleration began. cover of the "washington post" is fed unlikely to pull stimulus. were the minutes to blame or not yesterday? >> i know you -- ce of. but it was very funny, one point in that great conference call, said we picked a bad day to repor
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report. z a >> stock down 5% prior to the fed minutes and selloff, minor detail. >> people used the negatives in the conference call to buttress the idea this is perfect, fed's gonna tight exactly a time when things get weak and gasoline prices are so high. then the refiners are going down. there's no place to hide except for general mills. name a couple stocks that were up. when i find that when everything's as bad as everything was good and then i come in and i know we got to talk about this i see google, $1,000 price target, joke about that. it does take your breath away that the analysts, still analysts trying to get stocks to go higher in google. there's still short squeezes going on, walmart supposed to be terrible, it wasn't. the same time, the news flow changed it just changed. >> would you use a dip as an opportunity to buy? >> i think that win take a look,
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let's owns a the example of lennar toll brothers. when -- this was a 33 going to 38, everyone wanted in. and now it's 38 and i hear people saying, listen, it ghettos 28, i will be interest ready. i don't think it gets to 28. i just don't think. my inclination is not to back away. there is a terrific upgrade that carl flagged very early this morning about nike. i haven't been that big fan of nike, gave up on nike. saying china could be better. that's flying in the face of what we have heard the last four week bess china. i regard that call as -- that will be the test, that will be the fulcrum name. can nike hold up in a day where i would have thought nike would be down a buck and a half? >> you mentioned walmart. fourth quarter earnings beating estimates staying there increase annual dividend to $1.88 a share but the company giving outlook falls short of expectations, citing higher payroll taxes and
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other current economic factors as head winds. they say the pace of tax refund check activity is picking up, normalizing sales but they say for the current quarter, eps will come in lower than expecting. >> i was worried when they reported last. said earnings are going to come in not as good as they thought. then ten cent better. walmart may be playing the game here, too. that said york understand -- walmart is very high. they have good dividends. squawk a good discussion what point is walmart cheap? wall smart great company but we all have a to agree if that customer base is the one most afflicted by higher gasoline prices i and by the end of the payroll tax holiday. >> the analysts on squawk saying go with the target, with the -- >> costco does not -- you know better than anyone, it does not come in. it does not come n staples and office max and office depot, they are worried about coast coe, the super markets worried about coast coe, the vf corps
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worried they have to sell into costco. costco is this undercurrent situation, worried about bradley's in the '80s and '90s, jamesway and ames, now worried about smith corona typewriters and remington typewriter. >> skeptics say the tax rate was favorable, low quality, underwhelming. comps for all of 2012 declined sequentially. their cost suggest behind schedule, anything going right with them now? >> yes, a big short position. i personally think -- i'm waiting for another shoe to drop in the "new york times," i bet you they have got more -- >> another mexican bribery bottom perhaps? >> that's when i want to buy, i see a story says, you know what not done with mexico, by the way, the store that was owned by walmart in the up to i went to in mexico is no longer a walmart store. anecdotal? i'm saying people are looking
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for anything and walmart, look, walmart, 67, i would say this is a great opportunity, walmart at 70, i don't want to chase it here. a lot of stocks that are down. >> spicy anecdote there. >> thank you. >> move on to google, jim said a couple bullish calls today. clsa upping the price target to $1,000 from 900 citing google's recent announcement of a new ad management system. bernstein raising it to 1,000 from 820 feels the rapid adoption of smartphones, tablets is an opportunity for large value following this article in the times that you says google is enlisting will designors to make its glasses more stylish n this case, parker, on this program before, well known designer. can we get around the $1,000 targe target? >> how much cooler is glasses than wristwatch? fossil declares it is a glasses and sich with the glasses, i'm all over it.
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google, whatever they do is hot now that is how i feel about the $1,000 price target. i don't like that, that is "sports illustrated" jinx. a business week equities. >> apple jinx >> >> yes exit s >> started coming in with apple price targets of 1111 on the street, that's went cracks showed up in the story. is there, in your view, reason to be worried about google in the same way we should have been worried about apple when it was approaching all-time says no >> only in the general context of a market i think wants to correct. you -- this is a stock that went from 648 to 806 in a short period of time. i think pete najarian this morning was tweeting, said this is the wrong die it. you wait for the stock to pull back 50. mocks the tape to say that 1,000. >> talk with james lee, on that call this morning.
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>> used the 999 target. stores that are 99 cents. psychologically. later on, president and ceo of sony computer entertainment america will give us a new look at the play station four after the unveiling last night k it live up to the hype and save sony? one more look at futures, a lot data on the way. [ male announcer ] i've seen incredible things. otherworldly things. but there are some things i've never seen before. this ge jet engine can understand 5,000 data samples per second. which is good for business. because planes use less fuel, spend less time on the ground and more time in the air. suddenly, faraway places don't seem so...far away.
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a lot of people saying why haven't they bought netflix, spotify, pandora, the edge that could come from that? why haven't they taken a major step to go more social and block twitter and say here is 50. is, i don't think i want some new security you that's like tuna with good taste. i want tuna that tastes great. >> taste great. >> we average -- what was his line, average and acquisition every month, looked at the big deals they don't pass our screen tests? >> i think you want -- look, i don't think there are many people who are in this thing in order to be able to get a better preferred return.
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>> yes. i think as a former hedge fund manager, when a stock lost its growth, you just had to accept the fact that it would be this transition and you are part of the transition and you can leave it and come back or now you can sue them and go to court and i guess i'm old fashioned. i like the idea that you could come out and say, you know what i guessed wrong. i thought they would do something bold with their cash. they didn't. i'm going to leave the stuff. >> apple bought netflix will you be more positive on the story? >> definitely. >> apple bought pandora, more positive? >> pandora and spot any, all bases covered. i like new lines of businesses, where i'm most worried about apple and worried about apple along those lines. netflix in 27 million home, not expensive stock, i know it has doubled. shouldn't have been that low. i just want am, if they have -- to own apple tv, i think it means they ought to buy a directv, go have a big investment with someone that has
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broadband and wireless. they should it step up to plate and do something bold with their cash. no surprise apple is no longer the number one hedge fund position, now aig? >> i saw that aig is obviously coming into the quarter, i know closing bell, but that's -- that's very heavy burden to bear when your number one owned by hedge fund. >> when we come back, shares of verifone plunging premarket, cutting fiscal first quarter estimates after the bell. talk about this quickly before we go to break. had pay on -- >> from davos, pretty cautious, wouldn't anticipate very specific questions, there's doubts about whether or not in the face of competition from the likes of square if ver phone can still sell the hardware and also collect on service, company in some sort of transition as it figures out, other companies are giving the hard wear away, make
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money off a cut of the transactions. >> i understand the samsung android is going to have breathtaking pay interfaces that will cut out a lot of people. david faber is going to speaking to ebay, very good piece in ebay, unfortunate about how ebay is dissing the media. i don't want to be in volunteered d.a. phone's shoes. only michael jorden could switch hands from right to left. happy birthday to him next weekend. member of aarp. >> perhaps. >> karen finerman recognized this stock. >> she does great work, one of
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the most exciting people comes on tv >> kudos to her. >> working, can't come on our show. >> ten minutes until the opening bell rings on wall street. are you ready for today's market action? cramer is thing prepare. he has the mad dash coming up next. shares of tesla under pressure this morning after last night's earnings report. the first reaction from ceo elon muss income a cnbc exclusive straight ahead. look at futures, once again it does look like we will go to the downside right here at the open. more "squawk on the street" straight ahead. tdd#: 1-800-345-2550 when i'm trading, i'm totally focused. tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 and the streetsmart edge trading platform from charles schwab... tdd#: 1-800-345-2550 gives me tools that help me find opportunities more easily.
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you're thinking of the 1.6 million daily customer care interactions xerox handles. or the 900 million health insurance claims we process. so, it's no surprise to you that companies depend on today's xerox for services that simplify how work gets done. which is...pretty much what we've always stood for. with xerox, you're ready for real business. we all work remotely so this is a big deal, our first full team gathering! i wanted to call on a few people. ashley, ashley marshall... here. since we're often all on the move, ashley suggested we use fedex office to hold packages for us. great job. [ applause ] thank you. and on a protocol note, i'd like to talk to tim hill about his tendency to use all caps in emails. [ shouting ] oh i'm sorry guys. ah sometimes the caps lock gets stuck on my keyboard. hey do you wanna get a drink later? [ male announcer ] hold packages at any fedex office location.
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7 1/2 minutes to the bell. jim's mad dash. >> this is lynn energy, very good, mark ellis. under attack recently, doing chesapeake-like games. showing when do you a stock deal, get more oily, raising energies oil and making nat gas is the thing, you can see a stock can fly.
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that is a lot of oil in california, a lot of oil, shale oil, particularly in northern california. this is the next big place to watch. if they can make peace with california, there is a lot of oil in california, shale oil, shale gas that can come out. i think a brilliant acquisition. a fantastic thing off the radar screen, only a little bit in texas, a little bit based. >> fascinating. >> a big deal. $4 billion deal it. >> credit card issues getting an upgrade at ubs. >> talked about vera phone. uba has fought this move, these stocks rocket he is. today, come out and say we are going sell to hold. i question the credibility people who have fought big moves, had a sell on it, then a little bit moved out. suddenly, they are warming up. come on, you missed a big move. >> lastly, citi goes buy to hold bhp. >> people ask me what i'm worried become it is the endless
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pressure in the my earth and the materials. free port yesterday, 32. bhp, looks like -- these are rolling ever. the junior gold minors are horrendous. joint global up yesterday on rumors. why are these going down so hard? >> you think god is overdone? >> i like gold az as an allocation, a currency. these miners, they are the weakest, they are terrible. terrible stocks. ran gold, a well run company. >> going back to late 11. >> the euro, by the way, looks -- versus the dollar, the euro really come down. something to watch with the
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metals, rio tinto a fine company, bhp a fine company. rolling over that is worrisome. i don't think they are done rolling over. home builders falling sharply last few days. an analyst says there is another sector you can play to make money off of housing, the opening bell on a thursday is just minutes away. recognize me.
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it's just common sense. from td ameritrade. see if the healing begins today. watching cnbc live. the second worst day of the year so far for the dow. jim, the highest nyse volume of the year, which is what some people found a little disturbing. >> it was jarring. no doubt about it. when you saw that boeing, the most conscious stock, one of the few stocks in the dow up. the dow wasn't the worst of the year, s & p was terrible, you have to regroup. i fell backward this morning thinking about, okay, i still think the autos are strong, maybe a pause in housing not that bad, retail dropped off a little bit, but i also still think, you look at lumber prices again on toll prices, lumber
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going up, a tale of good, not bad. i can't find my major themes disappearing here, aerospace here, housing still here, oil is still here. >> you mentioned housing. today, steifel, upgraded home depot back in '07 cut it is to a lowell. >> there is the bell. at the nasdaq, swedish
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industrial group. just spoke about them seconds ago. you mentioned boeing, ford, too, making news, hiring 450 workers, investing 200 million in an engine plant in cleveland, little by little here, jimity, kind of things the president was talking about a couple of weeks ago. >> i think ford is a european story, if they get europe under control, it will be fine. i had the good fortune of pulling one mark fields when i was at the super bowl, very bullish about america, i think that's quite right. they got to get europe downsized quicker than almost any company. that's how you get stabilization in stock. >> talking about the miners during the mad dash. take a look the at freeport-mcmoran, copper plays, saw a big pull back in shanghai. there's more talk that the government is telling local authorities to take decisive actions to curran property prices and so all this talk about coming property price and cooling off the real estate
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market there, seeing stocks up, feel the impact. this has been going on the past few days, seen a day after day after day chipping away at these names, another reason why we are seeing weakness here. >> always inclined to think that this might automobile good level but free port is a momentum stock, it goes -- always overshoots either way. i don't like their indonesia options. my contacts who do a lot of business with china are saying there's a lot of shifting to pvc when they can't use copper, to aluminum. aluminum pretty good conductivity. they are anything ling, i don't like stocks. >> talk about sanders farms, higher chicken prices benefiting them but what they said where they are seeing demand and weak demand very interesting. retail prices for ching were
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holding steady, demand holding steady at the retail level, where they are seeing weakness is in the food services segment, food services being restaurants, seeing some weakness there in terms of chicken demand, maybe think you people are going out to eat less. >> mcdonald's does a big mo of into chicken wings, the vein of buffalo wild wings, we could see a pickup one reason the heinz has had one foot out is because of this restaurant trade. they do a lot of restaurant service. cisco, not the cisco networking but syy, has also not been able to get out of its own way. ? great tell, chicken wings are cheaper. >> by the way, buffalo wild wings, you have talked to sally many times, we have, the ceo at bwld, do you think an adverse impact if mcdonald's -- even if it had the effect only of raising chicken wing prices? >> yeah, i do. i don't -- i never want to go
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against mcdonald's. i think mcdonald's has a -- is a -- i defer to you you a technology story. they seem to -- when they go in, they tend to be pretty good tasting you. >> an engineering -- an engineering company is what it is, kitchen engineering, spoken to people about the wings, very hot on them exwon't comment on the national rollout rumors but clearly, the tests in chicago and a couple of other cities were good. >> very successful. >> think about dominos, when they -- when pad wa came in and said the taste is bad of our pizza and going to reinvent it, do a lot of technology, then that stock went from -- if i
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were buffalo wild wings, it would be whistling past the graveyard. >> some said the fish mcbites, grill ready cheddar onion burger, showing pipeline gusto. missing for a while. >> tell you that, terrific ceo, the well was dry, they have got exciting things. i think mcdonald's is a great american company, a worldwide franchise, every time it goes down, get the analysts downgrade it, boom there it is at 93, hated it at 87. but buffalo wild wings is, i think, in many ways, they are -- >> you know chesapeake pretty well, jim, 26 cents a share, exploding items, that was above. conference call, people staying sounded a lot different than any call mcclendon ran. >> aubrey a visionary dwhu with natural gas. i don't need to tell you what he did or didn't do in terms of the ethics.
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he was cleared. chesapeake, i can't be cleared, 80% natural gas, only 14% oil you 6% natural gas liquid, not enough versus eog, made that rapid revolution into being oil and why lynn energy bought barry, largely oil, devon disappoint willing yesterday, down 4, again, not oily enough. chesapeake is not oily enough, just not. >> just take a look at the home builders here, seeing since of rain and toll brothers making the most progress up a percent on a down take. we talked about this, joking when you left the set, i wonder if toll brothers would turn around today's session that would be a tell it didn't. doug early made the point, a lot of people hung up about the average price of the home delivered during the quarter, falling sequentially and year on year. he reinforced the point, these prices are very lumpy, they can have a lot of deliveries of the high-end homes, terrain and manhattan that will boost the price the next quarter. don't get too hung up on that investor, at least today, using that pullback as a buying
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opportunity. >> conversion number, people coming to see the buy was very good. i also know that they talked hot, hot, hot, hot in the areas that were very hot. >> yes. >> look, it's early, i don't expect toll to -- i mean, look, i think people want to sell here but i also feel that the fundamentals for toll weren't being reflected as well as they should have. i think that toll brothers, the lumpiness did shock me until i realized apartment buildings opened. >> closed one unit in manhattan, $3 million. >> suddenly in awe. lumber costs were up. dry port costs were up. you could argue, wait a second, inflation is going up, not labor, which is what i principally cared about. those were momentum stock. they have become like technology stocks used to be and people were playing theme little too aggressively but it's fine. i just want to caution people, again, the market seems to just want to come in and the sequester stuff is now hanging over us.
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and i know when i pick up the paper tomorrow, i'm going to hear a horror story about long lines at the airport or that people are not going to get the health care they need, still not going to hear that the army should cut back on the number of jones. been reading that ike and wand peace. eisner a genius about the stuff. they didn't have -- marshall and ike didn't like having a lot of jones. we got a lot of jones, but the 800,000 civilians that they are whacking. >> one more check on vera phone this will end up being the story of the day in terms of bearish action, down almost 38%, a 2 1/2 year low after the warning and guidance last night. unbelievable. >> kitchen sink sort of conference call, they said, you know, get as much revenue from customers in brazil, the uncertainty in venezuela, europe was weak. no taxing deem in washington, d.c. >> tumbled 10% the session after its last three-quarterly
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reports. >> reassuring. the kitchen sink where you have to drink drain know in order to be able to play i felt that -- i drank fracing fluid. >> did you not? >> yes, i did i did not throw it up. but i got to tell dish. >> what is did it taste like? >> yes exfracing flew wirksd haliburton has a vegetable-based fracing fluid. it wasn't tasty. it tastes -- it wasn't like a mcflurry or anything. but this one, you need to have a very strong constitution to own berrera phone. >> check with bob pisani, here with what is moving on the floor. >> something we haven't seen recently, weak open, materials, industrials, financials, leading to the downside you can ugly overseas, the global markets, forget about it. i should have stayed home. lousy pmi numbers. tell you what is worrisome, france is joining the periphery you being really weak. france is core, supposed to be strong, only germany up in the
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pmi numbers, very worrisome about france. italian elections my weekend. did you see this italian bank co came out and said 20% of italian company does go under because their top line growth has collapsed so much in the recent recession. is that an interesting comment. remember this weekend, italian elections. asia awful. shanghai down 3%. worst showing in an entire year. china trying too cool inflation. remember what they did yesterday, cool down the property market? now the central bank is draining cash? that constricts liquidity for loans. and that's causing you some concerns with china right now. i sought most interesting call today, jim, was steifel, downgrading lowe's and downgrading home depot's. this is a very interesting call, basing on valuation and leveling off of house market improvement. i'm sorry, guys, but this is an interesting call but premature. just because we have get a little bit of consumer builder sentiment decelerating a bit, because mortgage rate russ going up a little bit you way too early to call a halt to the housing recovery that we've
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seen. kudos to those guys they upgraded these stocks in 2007, believe it or not, wrong for a long time and been right are the last couple of years, good for them, i think the call is a little premature, walmart, very simple on walmart, everybody was prepared. there's a lot of negatives in there the payroll tax, late tax refunds, referenced everything, the street was prepared for the worst. the stock trading up 1% now february sales started slower than planned due large part due to delay in income tax refunds. those are now coming n of course it was a problem but i think this is going to be rectified some what the dividend, 2.7%, walmart, right in the middle of the pack for the dow jones industrial average now. good news for them. finally, guys will they never learn? two congressmen are planning to introduce a financial transactions pack in the united states. don't you think they would know better? it was a loser in sweden, it drove business away from sweden, they had one in the 19850s, france just started it, elusive there. europe seriously considering,
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all the other countries, a terrible yesterday. tim harkin, peter defazio, both planning to introduce this, hope and plan that this will go nowhere. guys, back to you. >> bob, so right. speaking for our viewers, can i just say, really terrible, just terrible idea. let's shift to bonds and the dollar, rick santelli at the cme group in chicago. rick? >> it's kind of ironic, jim, you luke at this two-day chart, you can see rates going down, at least reversion, three basis points under 2%. year-to-date chart show it is looks top pill, the stock market sells off, the minutes hint, only hint you there,'s some anxiety about the buy program. one would think that that would be something that cause sell egg in treasuries, they are focusing on weakness in equities. convoluted? darn right. boone, under 160, reverse a bit. currency markets, dollar index, look at this two-day chart.
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wow. if you open it up, these are the best dollar index levels, i haven't got ton say this very long in six months. now, let's specifically look at the euro versus the dollar, year to date, because it's at the lowest level basically since the second week of january. but what's important, we talked about it yesterday, simple reversal pattern, head and shoulders, wow, looks like we dove through that neckline before the words even had a chance to slip out of the air. jim cramer, back to you. >> okay, thank you, rick. i love the enthusiasm from rick. get charged by it. i love t check out the latest news in energy and metals. bertha coombs in the nymex. >> all the bad news we are hearing in terms of the global market, strength of the dollar helping to weigh on oil. we are seeing crude here very technically weak today, falling belet 15-day moving average, the first time since december and head and shoulders pattern there and kind of near the low end of t fell below $93 for wti. what's not helping, bearish
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numbers terms of inventories, the american petroleum institute turk the industry yesterday saying that we had the sixth time out of the last seven weeks that we saw stocks building, even with gasoline, we will be watching for the eia numbers delayed by a day because of the holiday, gasoline in particular. the estimate is for a draw down of 1.4 million of the api numbers, saw slight build yesterday. as far as metals are concerned, we are seeing little bit of flattening when it comes to gold and silver, silver modestly positive, gold bouncing off an 8 1/2-mopped low, the folks with the spider, gold e at this time. f saying yesterday saw the biggest with draushlgs melissa, in 18 months. we will be back at 10:30 a.m. with the nat gas inventories from eia. next, elon musk speaking exclusively to cnbc about the future of the tesla and address questions about the company's vehicle performance plus first reaction to the company's fourth quarter results sending shares
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lower by 8 1/2% this morning. the man heading up the electrical vehicle initiative in new york city the deputy mayor of new york, will join us live. before we head to break, look at this morning's early movers on wall street. today is gonna be an important day for us. you ready? we wanna be our brother's keeper. what's number two we wanna do? bring it up to 90 decatherms.
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the stock, a crazy couple of weeks, tesla shares dropping after yesterday's earnings report after the bell. we will hear from elon musk next hour when we hear from phil lebeau.
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>> owning the stock is one of the pseudomomentum things. 22,000-plus cars. the feel of the first sole large i got taken in a by first solar for 50 points until i found this is not anything -- the chinese could desfroi it in a moment. some things seem uninvestable to me. i sat in the tesla and liked it very much. >> doesn't make electric charging stations appear at every corner that is the heart of the problem with a car like this. >> i talked with some of the biggest truckers why don't they use nat gas enjoys, why don't you give us nat gas pumps and we will use nat gas enjoys. >> trucks that do routes on a regular basis, you can do that. if you are just a fedex truck and don't know where your next delivery might be. >> can't exactly top off. >> good for waste management. overnight fillings.
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i know that some of the bicker trucking companies switching, like 200 trial trucks from one of the biggest that i know about the same thing with electric. you got to make it so that they are universal. david crane, nrg, he proposed this. filling station, but tesla is a -- it's chimerical. the stock itself, you are betting on this future, future. i don't know. i like the present. >> well put. all right. >> meantime, google's in talks to make a more style inn set of google glasses, according to "the new york times" there is speculation that nyse-based startup is in negotiations with the tech giant that fwroings this squawk squawk on the tweet. if google wants google glasses to have more style it should blank. tweet us your response at "squawk on the street." we will share them with you
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"squawk on the street."
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minutes away from key data. simon has that >> the google call, 1,000 on google, 20% upside in the analyst making that call will be live on the program. the deputy mayor of the city will be here to talk about how they are intending to put charging stations, electric charging stations, across new york. and i think, carl, we are in the process of confirming you the lawyer in miami who is trying to get a class action lawsuit going against carnival for the "triumph" last week. six in 60.
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another upgrade for groupon. >> piper saying international business is good. this stock no longer too early to buy groupon. >> home away might you can the quarter. >> this is one of these companies, i know this company very, very well, you want to -- it's a timeshare, high-end timeshare, also b & b it does a lot of really great stuff. i was proud of these guys. >> peg ga systems. >> customer relations management software, salesforce.com for customer support and consulting, shows that you is alive and well. >> the core secondary. >> not holding, 61.50 really breaking down. i think at a certain point, you got to pull the trigger, 25 million shares. >> imax. >> i was cautious on imax last night. i was wrong. i max, let you know, the great thing about imax, off lot of 3-d movies they do well. doing a good job there >> arm holdings. >> watching arm holdings a good tell for high-value technology. bottom soon, not yet.
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>> all right. let's get to tonight. what's coming up? >> millennial media, mm, i got to till this is a stock that maybe people thought split yesterday but it actually had a very disappointing quarter. i think mr. palmieri will come on and explain why google is not killing them, what the strategy is, people should listen, because this is the -- this is the stock that was really crushed and i would like to know whether it's gone knapp bottom any time soon did have very bad guidance. en >> need your guidance tonight and all through the day. >> thank you, buddy. thank you. when we come back, breaking data could move the market either way, philly fed after the break. don't forget, meg whitman of hewlett-packard will be live tomorrow at 9 a.m. eastern time, faber is out there today. we are back after a quick break. to grow, we have to boost our social media visibility.
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we are trying to bounce back from the second or first worst day of the year, depending on what index you are looking at. s & p, of course, holding 1052, dow just below 13870. get rick santelli, curtain raise what is coming up here, rick. already gotten claim, already gotten cpi what do we got now? >> i tell you what i think existing home sales for january's important because a couple of months back, we were a wester can under 5 million, that was the best since the winter of '09 that 500 million threshold. it comes to fed. these numbers will be important. a february number and it is fresh. number should be coming out momentarily, here we go.
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existing home sales, didn't breach the 5 million mark, but 4.92 million. of course, that's seasonally i adjusted and analyzed. last look at 4794 retrograded a smidge to 4.9, puts it up a little less than half of 1%. leading indicators were up .2, maybe the number is most important is philly fed, minus 12.5. minus 12.5. so, thats is the worst number since the june release, a little bit over half a year. carl, all yours. >> thanks for that i think, rick. philly fed was estimated. consensus was for positive one. we got. >> a, as rick said, minus 12 and a half. reaction to the existing home sales by diana olick in washington. >> sales flat in december -- january because of that december downward revision. still 4.92 million units but up
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9% from a year ago. sales up across the nation except out west, found nearly 6%. that, realtors say, is due to an acute inventory shortage. inventories nationwide you that is the story, down 5% in jap month to month, down 20% from a year ago, just 1.74 million homes for sale right now. that is the lowest number since december of 199ed. that is what is holding sales down. median home price you can $173,600. up 12.3% from a year ago. but remember, this number is about the mix of homes that are selling, far fewer distressed homes selling, much more regular higher-priced homes selling. that is shifting that median home price far higher than we see in other surveys. we are still seeing a lot of investors in the market. still one-third of sales are all cash at the moment.
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right now, it is a wash, if somebody puts their home on the market, they are going to generally be a buyer of another home, they are not adding to that supply. sales not really moving in january. back to you guys. >> thank you for that. checking intraday it either the dow or the s & p, session low here, philly fed a disappointment, back below 1500. >> tremendous weakness in the financial group, no surprise, perhaps one of the highest fliers in the rally, seeing 2013, bank of america 2%. citi down 3% that the hour. look at the nasdaq, like in yesterday's selloff, the nasdaq felt the most pressure, seeing big cap technology under the most pressure again today. got microsoft, intel, apple amongst some of the biggest losers here, google holding onto its gains off the back of the two, price target rates from clsa, as well as bernstein, $1,000 a share. google surprising, up 1%. technology overall again weak. >> people may be looking for things like a going toll hold
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that 800 number as a tell as to whether or not we are going to slide further. more market reaction, bring in the president of platinum partners to talk about where we are, ari landers. welcome back. >> thanks. >> don't need to tell you how many things appeared to pile up against the bulls heart past 48 hours. much ado about nothing or not? >> not much ado about nothing. all the data this morning, which is nice, clearly the fed minutes were the most important thing. bernanke has been back stopping this market for months. if things are going to change, that will be significant. >> between the minutes and between the sequester, between either gas prices or some of the macrodata we are getting, does lead doubt notion the economy is slowing down? not growing fast enough to justify the runs so far this year or something else? >> so, more the second thing that you said. i think we may see a rally from
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here but this market is going to peter out some time in the next six weeks. the economic assumptions, earning assumptions priced into the s & p, way to high. >> let me just highlight that many people said we rallied as strong as we did on the markets, yes, because of central bank action but the assumption that growth would appear worldwide in the spring, germany going to continue their detrachblgts it is not so great for america either, you are in a sense testing whether you kick away one of those pillars of support for the rallisome that fair comment, in your view? >> it is very correct. i have been skeptical of the global growth story all along. i actually thought that bernanke would definitely be back stopping the market all year and i was still negative, if it really turns out that, the fed is going to get more hawkish really look out.
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i think my year low target of 1300 on the s & p is very achievable. >> a lot of people at this point seeing the markets decline today and yesterday, what are the safety rates in this market. these are all stocks that had massive runs and historically high valuation, compared to themselves where do you think the safety is in this market if is there a such a thing? >> i think the only safety in the market is in areas were there's going to be a lot of merger activity, because i'm negative on the earnings prospects for the big companies that moved up in the market, i think they are going to get very, very active on the m and a front to try to juice their returns. you want to try to find the targets of those big companies. >> how do you do that, uri? >> i think you have to look at certain sectors. i think you will see a lot of consolidation and energy in
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spots of technology. biotech an area you will see big drug companies very active, buying smaller companies better at developing drugs. those are some of the things we are looking at. >> if you're right, pessimism right are make the 1300 call, don't you inevitably force the fed back into easy mode, because now we have a divergence, in europe, the european central bank may ease, the bank of england is talking about easing, japan is clearly easing, don't you force the fed back into more and big, cheaper money if the market does fold? rnlg i think if we have a 200-point correction in s & p, you will see the fed ease, yes, i agree with that. >> melissa hinted at the challenge of chasing m and a, but energy, where else, biotech and health care, too? >> i think the biotech component of health care, where you see big pharma coming in and buying biotech, i think, you know, in
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the technology area, software, security, certain areas, companies make a lot of sense merging together. i think you will see that happening. those are the sectors will be the most robust. >> appreciate your time. certainly a good day to have with you that call. see if we do in fact, get to 1300 this year. going to be some sleepless nights around then. thanks again. >> thank you. >> check on walmart. trading high her at last check, 2.6%, missed on revenue guidance, also below expectations on the cnbc news shrine matt team inner, wells fargo securities, a neutral rating on walmart. great to speak with you you matt. why do you think walmart stock is trading higher today? >> i think that last week, they indicated or there was a leak that sales were "a disaster" and clearly, i don't think they are that bad in terms of the guidance for q 1. also disclosed that u.s. sales
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picked up last when the tax refund checks started flowing. i think there is light at the end of the tunnel from that comment, particularly when you think about the other tax hurdles that customers are facial and higher gas price. >> what is puzzling, i read the line about the pickup and activity because of the tax refund checks, yes, seeing that pickup in activity in the past week or so but yet they are sticking to the guidance for the current quarter, which is still below wall street consensus estimates. then you add to -- add to that the fact that the past ten ten quarters, nine out of the ten quarters, inventories outpaced sales then a streak of declining flat same store sales numbers and you think back to the walmart when the stock did nothing for ten years r we at that point now, matt? >> i think that's great point about the tax refund activity
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you why don't we pick up that the rest of the quarter and i think the response to that would be, look, when people were getting those checks in january, they would go out and buy a new tv for the super bowl, we don't know how they are going to spend that money now. giving this timing shift, we don't know how they are going to spend this money when they get it a week or two or a month later. it's probably conservative. you know exlogic would say that as soon as the total refund amount doesn't change that much, year-over-year, they still pick it up in their quarter ending april. clearly, i think that is the biggest question mark, why, if the checks are starting to flow, you know, why is the guidance so soft for q 1? >> getting to the second part of the very long question, i apologize, matt, that is that walmart has had a tremendous run out of a decade-long slumber in which we saw the stock do nothing and also same-store sales growth eessentially do nothing. you are you concerned that perhaps walmart is returning to
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that streak of just sort of languishing at this point after this massive run? frnlt main for the core stores, the most interesting things that came out of the release this morning, which probable lives missed by some folks, is for the first time they actually disclose third investment they are making in e-commerce. about nine crepts in earnings the investment $450 million. mentioned they are focused on core markets, they are putting a lot of money into multichannel and e commerce around one thing to be encouraged about it is that that could end up being a real driver of growth u look at other u.s. retailers that disclose e commerce sales, for many of them, it's driving half of the comp or more. so that is the silver lining that kind of we are paying close attention to, in terms of the stock, you're right i it's a great american company, but it's a big boat, doesn't go that fast. for 13 times earnings and low
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double digit growth, i would rather on the dollar stores here. a similar p multiple and offer high single-digit growth. >> appreciate you joining us, matt team inner of wells fargo. >> tesla motors ceo elon musk has to speak out what he has to say about the vehicles, the company's quarter, the fight with the "new york times" and a lot more. then the deputy mayor of new york tells us how he plans to make 20% of new parking pace spayses in the city electric vehicle charging stations. "squawk on the street" will be right back. [ male announcer ] you are a business pro. omnipotent of opportunity.
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welcome back to "squawk on the street." i'm josh lipton. market skeptics often pointed to two big worries, one, they point to volume, said there hasn't been enough trading to justify the bullish move in the market and have consistently talked about the vix, the fear gauge, cat tonic, but now it looks like the vix is starting to pick up. it's up 7% today, back above 15 for the first time since january 2nd. remember this comes after yesterday's move, which was the largest jump since november 2011 melissa, back to you. >> thank you, josh lipton. tesla shares hit today after last night's earnings report. phil lebeau spoke spoke to co and co-founder elon musk in an exclusive interview. phil? >> tesla shares whacked today,
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down almost 10%, this as the company stays is now expected to be profitable in the first quarter around remainder of this year. what is you the putting some pressure on the to something a little bit on the earnings report. did report a wider-than-expected loss of 65 cents per share that comp bearse 53% share -- 53 cents a share estimate. and in the fourth quarter, they did see higher production costs as they were ramping up production of the tessa model sy? some of it was a delay in parts and also massive overtime. listen to tesla ceo elon musk explain just how long the workers were working on the line. >> i feel good about the progress we made. in the end, people worked seven days a week. the average amount of time a technician worked at tesla in september was almost 70 hours, which is really --s's incredibly expensive and also not
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establishable. people just get burned out at that amount of time. >> they are bringing down the amount of overtime they are working, acordsing to mr. musk. model s cancellations, they did cease in the fourth quarter n part, tesla wants to weed out people who says, yeah, i'm going to reserve one, if you're going to buy one, you got to step up to commit to buy that. ceo musk says the majority of model s buyers, they are ordering the longest range battery, something to keep in mind as we watch this company in the months to come. one more thing, i want to show you this chart, simon, comparing tesla versus toyota. listen, tesla is out of control, stock keeps growing, only up about now, what, only 1% the last year. look at toyota, up 21s%. a lot of people thought talking about how stocks are moving. you really got look at the charts and then you will see the true comparison between some of these automakers. >> for sure a big move on toyota. for the moment, phil, thank you very much.
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here in new york, the bloomberg announcing last week that it wants to make 10,000 electric charging stations available within seven years, right here in the big apple. moving to support demand for electric vehicles on the streets. cass who will sway deputy mayor of operations for new york city, in charge of spear heading the expansion of the electric vehicle parking program. good morning to you. >> thanks, simon. good morning to you. >> how does this work? you change the building code and what happens? >> well in new york city, we produce about 10,000 parking spaces a year. a and's a combination of residential and commercial development. what we are working to do with city council, change the building codes to require that 20% of those spaces would be required to be capable of charging an electric vehicle. and so over the course of seven years, you project out then what you think your level of development is going to be, that adds up to about 10,000 spaces. >> how much does that cost the taxpayers? nothing?
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>> well that cost would be built into the development model. you are plugging into the grid you can not sure what the -- >> the taxpayers pa have to pay for -- >> not a taxpayer-funded initiative. >> private sector will have to pay? >> yes. >> do you any evidence that there is substantial demand for electric cars in new york city? >> well, new york city has had, first the city itself, has had ten years of experience with electric vehicles in our fleet. we have about 500 plug-in vehicles now. >> in the city's fleet, mandated by the politicians. in the pry vac sector, which is what this is after, do you have any evidence amongst private citizens in new york city of burgeoning demand for electric cars? >> i know overall the last nine months, electric vehicle ownership, the country's up about 4%. now, new york sfirks the private sector ownership is small, but part of the way you generate demand is making possible to own
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and used electric vehicle. >> what are we seeking to achieve here? >> no i think there are two reasons from, an economic perspective, you see the price of electricity, as a general matter, has been stable. part of that is because of plentiful and cheap natural gas. for the environment, it's much better. electric vehicle compared to your typical gas vehicle produces about 70% less greenhouse gas emissions. for the environment, why don't they just make, the man who suggested all new taxicabs in new york, electric, because people don't really care, as was pointed out by the daily news you don't care how they travel across the middle of the night through new york. so you're pushing an open door there, respect you? >> there's no one-size-fits-a - approach, part of our goal is to have a third of the taxi fleet become electric, if you did that by the way, would you be taking out 125,000 metric tons and greenhouse gases a year, if you went and did the entire taxi fleet, 14,000 cars that would be 400,000 tops, equivalent to give you an idea of taking 25% of all
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of boston's cars off the road. so there is a huge air quality benefit but i also think it's important to note, if you look at gas prices the course of the last few years, they have gone up three teens a percentage basis compared to the price of electrici electricity. if you look at the long-term trend, the long-term trending, if you look at the production domestically, natural gas, this is how 98% of new york city's electricity is generated ant trend there, price-wise, is good. i think you're gonna see, look, the environment is a really important livability, air quality, we have extended the life ex-spec tan so i have people in new york by three years under mayor bloomberg, but the end of the day about the pocketbook. i think you will see a demand on price basis. >> fares come down, consumers pay lower taxi fare it is consumers don't pay as high for gasoline? >> a lot that goes into the factors of an electric cab.
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lower gas prices, lower prices to fuel your car, that's ultimately, i think what will happen. >> keep us posted how it goes. >> will do. >> interesting, potentially controversial, deputy mayor holloway, thank you for joining us. >> thanks, simon. would you pay $1,000 for a share of gaggle? >> two analysts upping their price targets on the tech giants to $1,000 today. we will talk to one of them about why he is so bullish, coming up. larry kudlow is live at post nine. find out why he says the sequester could be a good thing for the economy. sir lawrence is with us after the break. . [ male announcer ] we began with the rx. ♪ then we turned the page, creating the rx hybrid. ♪ now we've turned the page again with the rx f sport. ♪ this is the next chapter for the rx and the next chapter for lexus. this is the pursuit of perfection.
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count down for the sequester continues. larry kudlow here.
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you don't care about fbi aukts and airport security? >> a couple things to say the washington monument gold watch syndrome is pure politics. i just want to say that. worst case, pure politics, never come to pass. here is a number. it is an important number. it is not $85 billion. not. that's budget authority. that's not what you spend. the real cut is $44 billion. that is it. $44 billion. it is one quarter of 1% of gdp. ie, there is no economic armageddon here and just over 1% of the budget. $44 billion is nothing. if we can't do that, then we ought to just hang it up, wash it up and this country will never solve its spending and debt problem. it's half of what is being advertised, these numbers from the cbo. >> no material impact on employment? >> no material impact on employment. >> don't see the unploefrnment
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rate ticking up? >> i do not. easy money environment from the federal reserve, at the moment, timed exactly right. i want to make a second point. really an editorial point. any time, in my view, i'm free market guy, any time you can lower spending and limit the size of government, it is pro-growth. take a look at the spend cuts from bill clinton's years, 21 to 18% of gdp, we'd boom. reagan, 21 to 23% of gdp, we'd boom. we should not fear a smaller government, we should yearn -- yearn for a more prosperous private sector. >> are the markets telling us we shouldn't be afraid of this? the markets saying we should be afraid? >> i do no i can't discern the market, federal reserve policy, china out there. i'm here to tell you the numbers are -- >> can i editorialize a point? >> i wish you would. >> i'm concerned that the gop just simply doesn't get it.
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you just lost an election, you couldn't appeal to women, blacks, hispanics, gays, a poll in "usa today" that subjects just 22% of americans, a record low, identifies being republican. >> right. right. >> not about the economic theory, larry, not about our mutual fiscal conservatism, it is about the hearts and minds and owe? what is succeeding going around the country doing what he's doing. >> look, i'm not here to speak for the gop. >> but the -- >> i sometimes advise them. i sometimes advise them. the country wants lower spending and deficits and debt. on this point -- >> that's not what they voted for, larry, they voted to put taxes up on the rich. what obama campaigned on. >> i don't necessarily agree with that the republican party made a loft mistakes. obama won the election happenedly. on this particular issue, the number of cut suss half of what you're talking about and if we can shrink the government and it's been shrinking slowly, it's good for the private sector, it's pro groul growth and i think the sequester is not to be
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feared. actually going to help economy and the stock market. >> defense sector, for instance, is held up under cliff worries. see how it is under these worries. >> the worst case scenarios ain't gonna happen. i have been through this when i worked for flaengt budget bureau. not going to be a government shutdown. there's going to be a continuing resolution. and they are going to reallocate from defense to non-defense. this story is going to turn out good, not bad. that's my point. going to be a plus story, not a bad story. >> larry, thank you for coming in. be sure to catch larry, "the kudlow report," every week night at 7 p.m. eastern time. coke just tanked their dividend along with walmart. talk about that in a moment. google, almost $1,000 a share in the future? is that possible? we will talk to an analyst who says yes. big upside next.
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welcome back to squawk on the street, i'm bertha coombs at the nymex. we have government's inventory number for natural gas, a drawdown of 127 billion cubic feet, a little more than the estimate, which had been somewhere between 117 and 121 billion cubic feet. we are seeing nat gas modestly positive today, the only thing in the energy complex right now that is positive. we do have oil continuing down more than $2 in terms of wti nymex hovering around that $93 mark. been below that today. carl that is the lowest we have seen oil since january 7th.
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we are seeing an awful lot of volatility in the energy space. we get the eia numbers on oil because of the president's day holiday at the top of the hour. >> the worst two days of crude. about an hour into trading, some of the stories we are watching, 7:30 on the west coast, 10:30 on wall street. hedge fund manager david einhorn taking his apple campaign directly to shareholders. he will announce a conference call at 2 p.m. eastern time to argue the merits of perpetual preferred stock. chesapeake beet beating the sometimes on the top and bottom lines, helped by lower-than-expected expenses, aubrey mcclendon steps down april 1st. end on a scary note, the market's fear index, the vix, up 4% today, back above 15, a level not seep since january 2nd, although likely -- never that low again. analysts thought upping
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their price targets on going toll $1,000 a share. clsa is one of them, the cost will help abrogate ad revenues, helping to drive that stock price higher. james lee is the analyst who raised the price record on google, he joins us now on the news line. thanks so much for phoning in this morning. we appreciate it. >> thanks for having me. >> it seems like the crux of your call is the announcement of this new ad management system that will seemingly solve the problem of the discrepancy between the cost per click for mobile advice versus a pc device. why do you think this new ad management system will actually do that? >> enhanced campaigns and simply guys how you buy advertising from google t breaks down into three simple variables. it has hundreds if not thousands of vare yaushls need to buy.
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right now, google system currently very open. you can buy it by operating system, by device, even on desktop by different macversus windows. more advertisers bidding on the keywords. >> the bottom line is that a company that buys a small business or a large company, they will be better equipped to sort of tweak what they are advertising and who they are advertising to and so therefore, more willing to pay a higher rate is that correct? >> that's right. basically, what we are saying is google showing a stat saying 90%
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of the outline pass download from multiple devices are. google is asking you give us all your relevant information about your business. for example, for national retailer, if someone is searching for you when -- on a mobile phone near your location, we are going to send them a map. >> you make the point the system won't online in the end of the month, june. when are we going to see this, calling for a 25% increase, upside in google's price, your price target. we will see a ramp up in the stock? >> the new? beta, anybody can see what is going to happen the end of june, beginning of july, part of the reason to do that is a lot of the larger scns, they need to
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port the information from the old system to the new system to optimize that. that is the reason they give them time to get that done. >> so, james in terms of metrics, you think cost per click flattens out early 14, righ right? >> right now, looking at cpc year-over-year growth or quarters, certainly saw improvement, the latest quarter showing that cpc declining year-over-year, if you are looking at the volume, who willistically on google based on estimates, 65% currently on pc. 25% is current ly smartphone an tablets. smartphone specifically, smartphone priced about 60% of that of pc, while tablets 80%. july first, tab sleet right now
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pc, desktop, the good with the bad july 1st. >> james, i'm wondering if there was any prep days on your part putting a $1,000 price target own google, you have done the homework, the models, everything on a fundamental basis forecast the price target, but seeing how apple started slapping ambitious price targets on the stock, are you worried that google will be the next momentum stock that will lose the momentum? >> i'm always worried. google is trading about 11 times next year's number plus cash. given the market poe the investment they have made and enjoyed, which allowed them to have 90% of mobile market share, given all the investment they had made basketball nish distribution costs, they are in
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a very good position in the multiscreen world where they can track users, doesn't matter where they are. one thing different from apple's business, the core business is really advertising, recurring revenues, very difficult to replicate. bloom perspective, we are very comfortable about google's valuations. >> thank you very much for phoning in, appreciate it james lee of clasa has now $1,000 price targets on google. up next, one analyst who says he is negative on the home builders but there's another way you can make money in the sector. he will give put insider's take on house after the break. hewlett-packard out with earn eggs after the bell about. thissing preown david faber will be at hq tomorrow for an exclusive interview with meg whitman on the back of those earnings right here on "squawk on the street." (announcer) at scottrade, our clients trade and invest
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the housing data and home builder earnings coming in this week not so hot but signalling a recovery in the housing market. negative on the home builders, one analyst says there is another way to plate recovery. jack, good morning. >> good morning. >> horton, negative. lennar, negative, pulte, negative, toll, negative. radium, positive. >> yes. >> walk us through why. >> a ter she year play on the housing recovery, had a phenomenal 2012. very optimistic view points in terms of both volume and gross margin in the builders, we think they are ahead of themselves, better companies than
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preimminent crisis. raidian, questions six, nine months ago, turned through the downturn, survive ready, legacy issue bus growing, growing from a number three, number four market share, mortgage insurance to number one. what's important is the fha, the government mortgage insurance program is pulling back. they have raised prices six times since 2010 to reduce their risk profile because they grew so quickly in the downturn to support housing you. so, as that mortgage insurance volume come bask to the private market, raid january a in a great spot, shored up the balance sheet and financial guarantee business that business is in runoff, they can contribute capital to the mortgage insured, we think they will be well capitalized through the recovery. >> the natural response what about rising interest rates, raise capital? both of those things are positive for the stock you say? >> yes. rising interest rates will shift
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the volume from refinance to purchase. purchase mortgage insurance is monthly pay versus a single pay refinance business. as the housing market improves and purchase demand recovers, opportunity to move in the mix of business. on the capital side, the move from 3 to 7 in the shares, relief on solvency, neutral on qb homes, raised common a few weeks ago, stock's up 20% from where they announced that deal. levered played in this recovery, seems to be an appetite for capital not saying necessarily they should raise capital and they need to, but the market would be fairly, would receive the capital raise as well. >> presumably, positive on raidian, business is predicated on ensuring mortgages for purchases, you still believe is there upside in the housing market recould have rick, don't like the home builders simply
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because of valuation? >> only up single digits. our new home forecast is up 20% year-over-year so we definitely think there's real trajectory here and recovery. home prices bottomed, they are moving up, a huge input, their share base goes down. builders are facing labor constraints, operation on materials, price improvement on raidian drops to the bought both tomorrow line, drops straight to earnings, we think a better play on price appreciation as well. >> the bigger the mortgage, the more they make? >> the bigger the mortgage the more they make, they insure the first 20% and the fee based on the size of the mortgage.
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>> finally on housing itself people saying market can't absorb the starts we are doing. others say inventories are still low, realtors begging them to up their starts house, could both be true? >> a lot of it is regional and gee graph geographic driven. the starts number now is different than precrisis. what i mean by that, doing 2006, 2007, single family, percentage of total starts, was about 80, 85%. today, it's between -- multifamily is 30 to 60%. we certainly have a demand for housing, our view is more of that is going to go rental, toll yesterday in the earnings call and lennar a few weeks ago, developed initiatives for rental property. yes, there is housing demand, household formation is created, that sort of thing, mortgage standards now, we think that is going to go into apaurmts. >> jack, interesting note. thanks for stopping by. a class action lawsuit being filed against carnival cruise lines over the events that
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crippled the cruise ship "triumph" in the gulf of mexico. we will take speak to the lead attorney representing the passengers that's next. fed and quantitative easing, rick santelli gives his take. don't want to miss that. stay tuned. transit fares! as in the 37 billion transit fares we help collect each year. no? oh, right. you're thinking of the 1.6 million daily customer care interactions xerox handles. or the 900 million health insurance claims we process. so, it's no surprise to you that companies depend on today's xerox for services that simplify how work gets done. which is...pretty much what we've always stood for. with xerox, you're ready for real business.
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lawsuit has been filed against carnival in wake of the problems with its ship "triumph." michael winkleman joins us now from miami. welcome to cnbc. what alleging carnival did long? >> essentially they were negligent or recklessly negligent in taking this vessel out to sea when there were numerous problems with the same ship. and instead of going back to mexico, they dragged them across the gulf of mexico, subjecting this to awful conditions. >> when people purchase a carnival ticket, they sign away their rights to class action lawsuits. it's a flyer, isn't if? >> no, it isn't a flyer.
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fortunately the u.s. law has a way to invalidate that statute. its our hope that the federal district judge will invalidate those provisions. >> your on community is divided on this. attorney jim walker, who specializes in representing cruise ship passengers says the offer is likely similar to what passengers would win so why go through the process >> some lawyers take some cases. we feel the passengers are entit entitled to a of a lot more than $500 than was offered by carnival. i'm looking forward for carnival to come out and start having a conversation regarding their misconduct. >> this show has again reached out to carnival this morning, which has again said they don't comment on pending legislation. let me ask you about taking the
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offer that is on the table from carnival. earlier one of your attorneys was suggesting they should take it because there was no strings attached and they could still sue through your suit. >> if there are no strings attached, they should take the money. if there are strings, they shouldn't take the money. >> we're out of time but just briefly now, what is the timetable for you? >> well, federal court lawsuits generally go quicker than state court lawsuits but i would gegs we'll have a decision regarding class status within the next six months to a year but stay tuned. >> mike winkleman is attempting to get a class action against carnival. >> let's go to the cme group. rick santelli in chicago. hey, rick. >> good morning, carl. yesterday when the fed minutes for the january 29th and 30th meeting came out, the markets moved. stocks moved down. and in an ironic fashion, so did
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yields. but let's think about what's going on. first of all, just because there's some anxiety within the committee doesn't mean the quantitative programs are going to end any time soon, though it could. it isn't on whether the fed programs buy more securities, it also has to do with the securities they already own. now that ownership may be a completely separate issue. whether you buy more might not alter the fact of what you own and all of that could change because there could be an exit as phil graham and john taylor wrote in a wonderful op-ed five months ago that's hanging on my wall, if we should see velocity in many at some point pick up, the operation of mad sales may force them to actually start selling. so it's complicated and it really caught the market's attention. look at nhr, the nasdaq, the s&p or the dow yesterday. but it also seems to have caught
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the attention of congressman republican ohio jim jordan. he is the chairman of the panel of house oversight and government reform, that's a committee, and in an article in the wall street journal entitled "house republicans demand more detail on fed stimulus program," he's a quote i find interesting, the historically low interest rates brought about by the fed's easy money policies have hampered economic growth by distorting traditional financial incentives and said it could cause significant problems with the federal reserve begins to unwind. there's a lot of issues there but i find it fascinating. i don't know if this committee will get any traction. we invited the congressman to be a guest at some point. spanish bonds, it was big news.
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spain brought dollar denominated debt to the marketplace. junk is already tightening on the barkley spread. maybe the main issue was addressed by mario draghi in july. the breaking up of the eurozone, if that's fixed all the other issues may still not take away demand for high yield. many investors will buy anything to get more yield but berlusconi may change that with the italian elections so stay tuned! back to you. >> thanks so much, rick santelli. >> the president and ceo of sony entertainment america gives as you look at the new console. back in two minutes. what's in your ear? oooo! a quarter!
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dow is down 61 points. a lot to cover last night. >> yes. we do have a very, very good lineup. we're having the talk about the housing recovery. we have barbara corcoran, as well as mark faber. he's been calling for it. and ahead of the oscars, got to talk to lionsgate, michael burns will join us tonight at 5:00. >> your old friend michael
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burns. and corcoran always keeps things spicy. >> she's always sassy, that one. >> we'll talk some europe in a little bit. >> for sure. >> in the meantime, here's what you missed earlier this morning. >> welcome to hour three of "squawk on the street." here's what's happening so far. >> we're bringing production on the eco boost engine and bringing jobs back to america. >> the only way to get gasoline prices down is introduce another fuel into the mix is the way i see it, which would be natural gas of course. >> i think there's an undercurrent in this country that the government spends too much. this isn't the way to cut government spending but i think people want government spending cut. google, whatever they do is hot right now. i don't like the thousand dollars price target.
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>> philly fed, minus 12.5. so that is the worst number since the june release. >> what we're going to do with the city council is change the building code so there's a requirement that 20% of those spaces would be required to be capable of charging an electric vehicle. >> google -- this is really advertising recurring revenues and that's very difficult to replicate. therefore from that perspective, we are very comfortable about google's valuation. >> it is a few seconds after 11:00 a.m. eastern time. some breaking news, bertha is at the nymex. >> we saw bigger than expected builds when it came it crude stocks up more than 4.14 million barrels.
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heating oil down 2 1/4 million and gasoline is one of the areas that we saw a bigger draw down than expected, so that's positive, down near by 2.8 million barrels of gasoline. we've seen gasoline come off of the lows and wee're also seeing crude oil coming down off of the low, we were down $93 a barrel, we've come off there as well. we're having the worst two-day performance in several months. oil right now very technically bearish when it comes to wti moving below the daily moving average for the first time since december and at an area that is very technically weak right now. if we don't hold he's levels today, we could move to the down side. it's the macro picture, the concern the fed made be easing its program earlier than expected and china talking about trying to curb inflation when it
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comes to housing that has put a lot of pressure on this market. in fact, the oil vix today up over 10%. so we are seeing a lot of liquidation on the long side. >> thank you for that. we are back here at post nine at the new york stock exchange, getting a check on the market's continued selling today after yesterday's blood bath. this isn't the first back-to-back loss for the s&p in three weeks and even at on half a percent, it is the third largest percent and drop so far this year as we are just above 1,500. one stock getting a lot of love today is google. the firm citing the rapid adoption of smartphone, tablets and improving costs per clicks as key catalysts push shares higher. and goldman is out with its list of most important stocks in the hedge fund world. after three consecutive years as the top hedgy holding, the apple has slipped to third, the new
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top spot being held by aig. a sea of red across the board. far weaker than philly fed. it is the start of a much larger pullback? and a tale of two techs in 2013. what could send apple shares down to 200 and is google 1,000 coming sooner than you think? finally, sony unveiling the many capabilities of the new play station 4 without showing the console itself. sony president of entertainment and ceo will join news a first ever cnbc interview. we want to bring in jerry castelinni. this is either the pause that all the buyers wanted or it is time to start losing some sleep. which is it? >> well, most folks were losing
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sleep if you remember a couple, few weeks ago when the market went up and they weren't expecting it. the nervous people ended up buying in the last few weeks and that's usually what brings your correction on. i still don't think this is of any consequence. if you look at the way the market has gone up, it's been very steady and consistent and now you have a sharp surgical decline, which is very typical of a good bull market advance. i wouldn't personally lose any sleep over this. >> really? we're looking at chart of the vix as you speak, jerry. we used to joke about how it could never fall below 20. people are acting like 15 is the beginning of the end of the new world. >> historically the vix travels in the single digits. our impression of where the vix should be include as lot of the '08/'09 history with it. with a steady growth and earnings and low pes, you should see a vix that works its way
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down to ten over the next couple of years. that's consistent with historical trends. so 15 is more typical of a short-term rally end and a quick correction, but please don't let that bother, you know, the underlying fundamentals that are fabulous right now. >> yeah, i mean, although, jerry, not to nitpick, but it does look like we're in for a little more of a protracted bat when will it comes to the sequester and whether or not this shaves a quarter point, a half a point, a million jobs, not that many jobs from employment, that's not a positive. i think you'd argue that. and people are beginning to do work at what happens to the s&p in the months following at 3.75 a gallon on gasoline. generally not good. how do you look past those things? >> you look past it because you start with some other very powerful offsets. 942 housing starts on an annualized basis is a much stronger housing economy than
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anyone forecasted and probably offsets at least the impact of sequester. the gasoline impact, if you notice, this rally hasn't really been powerful on the consumer side. i think the consumer stocks have been looking at these headwinds in terms of inflation or gasoline all along. those aren't your leadership stocks anyway so those probably are, if you're worried about a more protracted impact, those are the places that would be weaker. on the other hand, the industrials, those are what we like right now in energy and technology and those would be fed by these better structural up cycles. >> yeah, one reason maybe a lot of people are looking for the likes of a google or so forth to hold as a sign that we're not going to take a larger trip. jerry, as always, good to see you. >> thank you. have a good day. >> let's move on to walmart, trading higher after earnings did beat on the top line, missed on revenue, guidance fell short on estimates. how do you play the world's
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largest retailer? guy, good morning to you both. >> hi. >> good morning. >> takeaways from where you sit. >> i think there's a lot to do with taxes in this report, both indirectly and directly. so we saw this beat on the top loon by ten cents. however, walmart did have a favorable tax rate, better what they and the street thought they would get. so we have to question a little bit the quality of that beat. and then talk about taxes on the consumer. they did make comments about february and that those delayed tax refunds walmart believes is the reason why their sales were disappointing to begin february. so i think taxes really became a headline here on both ends of the spectrum for walmart. >> that's a good point. the low quality thing getting a lot of chatter. those e-mails that got leaked last week, are those meaningless if people are finally starting to get their refund checks? >> thanks to the guy with the
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fat finger who leaked those e-mails last week because the expectations were set very low here. the company told us that right before holidays comps were double digits but things have slowed down in february, they've slowed down at sams club and walmart itself. they've told us now that the tax refunds are flowing in, things are starting to stabilize a little bit. the biggest metric here that was concerning was that the traffic actually turned negative for the first time in five quarters so you have to be concerned about that. >> do you think -- stacey, they argue they're taking share today in the release, though some found that hard to believe given what comps have done sequentially and the challenges they're up against. >> right. so they said according to nielsen they gained 40 basis points of share, they talked about toys, consumer electronics. but the bottom line is their comps were disappoint hearing and there's plenty of blame.
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there's payroll tax, there's snow, there's gas prices and finally, you know, i would also worry about the dollar stores. they're getting very aggressive in promoting and really attacking each other. so that's another thing to think about over the next couple of month. >> courtney, we did have an analyst on from wells in the last hour. he said, look, it's a great american company but it's a big boat and it doesn't move very fast anymore. when you couple the gas prices, stacey mentions the dollar retails are and their own cost cutting initiatives that some argue today are actually behind schedule. >> that's very true. obviously walmart is a big international player. the u.s. is sort of the biggest part of that ship. international saw some better comps, brazil up almost 9%, mexico up more than 2%, but like stacey pointed out, the u.s. comps are disappointed. we showed earlier the bar graph of both the comps and the
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traffic, and you can see over the last year both are starting to decrease. that's somewhat of a concern. we're going to watch all the macro economic pressures at play. they're changing some of the assortments of some locations. >> what's a reasonable alternative if you're not into walmart? do you gravitate to costco, go g toward high-end specialty instead? >> one of my favorite stories is limited, which is victoria's secret. you have to look at companies shortening their lead times, that have international expansion and companies that own their space. that falls into the category. other companies doing well in terms of investing online, that's something that walmart talked about today. they're spending money online and they need to. they're falling behind in that category. that's the good piece of news we
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heard from them today, in addition to the dividend increase. >> limited has had a nice record of beats in the last month. >> when we come back, could the biggest oil find in the country actually be located in the state with the highest gas prices? our own jane wells is on the case. she'll join us on the case. and this is apple's fall from grace, the shares down over 16% from the beginning of the year. bethany mclean will drop by to give us her take not only on apple but also chesapeake. rick? >> we're going to stick on point today, topic fed. topic spanish debt. we're going to be discussing these two issues with andrew brenner. now andrew brenner is global head of international fixed income for national alliance securities, and he always has an opinion. this is an interview you don't want to miss bottom of the hour.
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take a look at the s&p. the consumer sector up this safeway is up more than 9%. josh has more on that. >> absolutely. on this down day, here's one name enjoying a nice pop, the supermarket chain beating analyst forecasts. analysts mention volume, the
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amount of goods sold turned positive, ebidta, turned positive, first time since 2008. and they changed their promot n promotional strategy from digital to mass promotion. up 20% this year. >> chesapeake earnings, we have the latest off the call. >> it was a solid quarter after what was a rocky 2012. they reported adjusted net income on revenue of about $3.5 billion in a year. i'm sorry, that was not adjusted net income. that was basic net income. chesapeake was overshadowed last year by tension in the executive suite, as you mentioned. its founder was stripped of his chairman title amid criticisms
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of overspending and related party transactions from key shareholders. as the year wore on, he became embroiled in a controversy over alleged bid rigging for land in michigan. he recently announced plans to step down as ceo no later than april 1s and a search to replace him is under way. a board review of many of these transactions found no internal misconduct by mcclendon or other company managers. those results announced yesterday. no questions were asked about mcclendon, though his absence was notable as executives avoided a number of questions about asset sales and his typical flair in talking about the business was not present. chesapeake did not oil and their other oil exposure is now 30% of their total mix, compared to 17% previously and a key spending measure had fallen to 6 billion
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from 8 billion earlier. the company has hedged half its privacy at 3.62 and average oil price at $95.45. >> what a fascinating story as they enter a new chapter. thank you, kate kelly in new york. >> could the largest oil find in the country be located in the state with the highest gas prices? it's where we find our jane wells today. she's going to give us the inside scoop on the fight for land there. jane, tell us where you are. >> well, technically, carl, this is kettleman city, practically it's the middle of nowhere. this is part of a huge cat and mouse game going on to try to tap into the largest shale oil reserve in the country, potentially more than 15 billion barrels of crude, four times larger than the backan shale.
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california could go through deja vu all over again. >> the first california oil boom here a hundred years ago but california remains even now the number three oil producing state in the country, in the lower 48. but miles below the conventionally pumped oil is what's called the monterey shale. companies are snapping up mineral leases from the bureau of land management and applying for permits to drill down horizontally as much as three miles. >> we've seen prices vary from $2 an acre back in the early 2000s to $500 an acre here in 2010. >> those folks out early want to be as quiet as they can, secure as much land and the mineral rights to that as they possibly can before the information gets
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out to others. you're here so it's not much of a secret now, right? >> well, is it worth it? this isn't north dakota. this geology has a lot of tactonic plates. what about earthquakes? companies like occidental and others, they tell they are not concerned wa w what they have found here. >> that oil is not going anywhere. there isn't a huge harm in waiting to understand what we're getting into and once we understand what the risks are that we have regulations that can address those risks. >> coming up, what this manse to jobs and revenues and a state that means both. the full story right now on cnbc.com. >> great live shot.
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can't wait to hear more. jane wells in california. apple meantime has had a hard fall over the last six months. when we come back, what could push apple below $200 a share some say. and bethany mcclean of vanity fair will weigh in next. look, if you have copd like me, you know it can be hard to breathe, and how that feels. copd includes chronic bronchitis and emphysema.
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turning our attention to apple, the shares down 16% this year as it falls from grace. google is on a slow and steady rise. two firms putting thousand dollars price targets on that stock alone. i want to bring in bethany mclean, a reuters columnist and cnbc contributor. bethany, welcome back. good to see you. >> good morning. >> we have einhorn doing his meeting today. that proxy fight will be
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interesting. you wrote a piece that's still ringing in people's ears whether or not apple is really worth 200. who know what is it's worth is your point, right? >> right. i'm not going to argue and certainly a $200 stock but 200 is every bit as likely as 1,000. i think there a lot of questions. >> because why? because of the opacity of their earnings power? what draws you to that? >> basically the opacity of their earnings power. it's a mobile phone company with a few other businesses attached and it's a mobile phone company that right now you can make a compelling argument it's losing the mobile phone battle to google. the android operating system doesn't leave anything for apple and there are a couple ways you can make that argument. if you look at the anecdotal evidence, what are rich hedge fund managers carrying, young kids in korea carrying? they're carrying the siii. the market that they still own is women in america.
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i don't know if that's a large enough niche. >> we've been talking about the two moving in opposite directions by exact amounts over the next three months and it leads us to some of these calls today on google, thousand dollars price target on clsa, a thousand dollars at bernstein, i think deutch is at 9:30. does that raise your eyebrows? >> well, i don't think it's a straight line to say google 1,000, apple 200. in order, it not a straight line to say google succeeds, apple fails, but there's certainly some push and pull there, right? the more google wins in mobile, the more apple loses. and i heard today someone told me that actually on the android google search is 30% to 40% more profitable. you can see google has a lot invested in android's success. apple could come out with a new product from nowhere, they have a history of doing that, albeit
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with a different management team. >> you've done a lot of work on chesapeake i know. people chatting about the different tenor had had from when aubrey iran the calran tho. do you think they suddenly get disciplined because he's gone? >> even the company said there's no real strategic change. there's still a lot of mystery and the executive suite. why did aubrey leave? differences with the board? what were those differences? the call today was good, earnings were good, but there's still a big question about this question which is what price does natural gas have to be to make it viable? even if you look at the past year, debt still at about the same level it was at the end of the year last year. they need asset sales in order to pay down debt and thus far
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you've had some buyers remorse among people who have bought assets from chesapeake,. >> three interesting stories, bethany. it's good to have you cover them again. >> back in a minute. at fidelity, we do it by merging two tools into one. combining your customized charts with leading-edge analysis tools from recognia so you can quickly spot key trends and possible entry and exit points. we like this idea so much that we've applied for a patent. i'm colin beck of fidelity investments. our integrated technical analysis is one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account. [ engine turns over ] [ male announcer ] we created the luxury crossover and kept turning the page, writing the next chapter for the rx and lexus. this is the pursuit of perfection. i know what you're thinking...
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the european markets are closing now. >> right on the nose and no mistaking that color of red all
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across the continent. after some of these pmi numbers. >> rough day for europe today. bare in mind they're factoring the 1.25 fall in the dow last night. they were closed when that happened and then some more, they've fallen still further. the important thing to realize i think in the last 24 hours is that we have seen the difference, difference, difference, difference. difference between the u.s. economy, which is okay, and the european economy which is contracting further. difference between a federal reserve that may step back from easing and other banks in europe that may have to go further in easing and difference between the eurozone as well itself. so the pmi data that carl refers to indicate that we're still getting the eurozone contracting in the second quarter, but look at the difference now between france and germany. germany is beginning to pull back but these two major economies right at the heart of the eurozone, the two biggest economies going in different
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directions, the rest of the eurozone falling and france arguably questionably going into a tail spin along with that. so let's work our way through the price action in response to that. yes, if you look at the minors because of what's happening with the feds and metals, you see the mining stocks are in negative territory. it's also time for a lot of europeans to book profits they've had. the french banks, for example, you can see they, too, are coming into negative territory. the question is what happens further from here? what does the ecb do? does it have to ease and how does it ease? that's a big question. certainly the euro vote yesterday said a six-week low. today it's bounced slightly. if can you have a look at the euro, you'll see what i mean. still the trajectory is down eyeing that key support. you could eye $1.31 on the euro the other one that we don't talk
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a lot about is the u.k., where i come from, britain, england where the sterling hit a two and a half year low today. it has bounced from that, the two and a half year low was 1.5138. the bank of england, it's really the state of that economy that's rattling the politicians. steve bare owe is in london. he says the u.k. government is so panicked with the elections a year away they are going into crowd pleasing measures but that is potentially further negative for the u.k. pound. when i came to the united states three and a half years ago, we were up 1.65. that's a major pair that's shifted a lot. >> a lot going on there, simon. thank you so much. i want to get a check on energy and commodities as well. after a rough couple of days,
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bertha coombs. >> yes, we're off the low after the inventory numbers, a day late because of the president's holiday. pretty good draw downs when it came to gasoline. i guess a lot of that cold weather has folks using their heating oil, gasoline in particular saw a bigger than expected draw down of 2.9 million barrels. that's been sort of the strength of the oil complex, if you will. but overall traders are talking about the macro situation here with the uncertainty over the fed, a move in terms of asset al owe kieccasio occasiw -- allocation being strong and when it comes to energy and metals as well. gold finding a little bit of a floor today after that huge selloff yesterday. nonetheless did touch an eight-month low overnight. in addition to the fed, there is concern that china is making much more noise about curbing
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real estate speculation there again. so no easing in china potentially as well. that's one of the things that we're seeing hit copper in particular, the industrial metals getting hit. copper having its worst six-day decline in years overall. carl, a lot of traders saying right now that the negative side is really where they're dangerous, particularly as we approach the sequester cliff. back to you. >> all right, thanks so much, bertha coombs. bob is here at the big board, talking about how back-to-back losses haven't happened too often. >> we had them last week. but today is a very even day. remember yesterday a lot of weirdness going on in the commodity groups and stocks in general. today much more even. look at the overall averages. there's a quick way to check how change things are. when you see everything same about the same but large cap,
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midcap, small cap down the same, it's about the same. put up the big sectors here, everything is down 0.6, 0.7, 0.8%. that's an even down side day. i don't see anything particularly sticking out like we did yesterday when we were talking about commodities and what's going on. you can see this in pressureries too. treasuries, for example are on the up side your corporate bond treasuries, that's your big one. both of them are up. you see high yield, hyg, that's down. high yield tends to move with stocks in more volatile times. the markets are moving very sensibly here in terms of a modestly risk off day. people have been asking me are we at a top now, are we not at a top now? i'll tell you a simple rule i've used for a very long time. the 200 day moving average for the s&p is right about 1410.
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we we are way down here on the moving average. i couldn't get the actual band up for you but this is a very, very wide margin for a 200-day moving average. any time you day moving average 8% or 9% below where you are, the market is usually at a short-term top. it happened in september, it happened in march when we were wave down here. at least technically the market is due for a pause. finally what could go wrong with stocks? the sequester is an issue, the italian elections are a big problem on the weekend. if the moderates don't win, austerity to call out and qe warnings have been on the cautious side, however, i'm not surprised. >> that is a good point. thank, bob. rick santelli is in chicago with reaction to the minutes yesterday and a look at you're,
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too. right, rick? >> absolutely. andrew, welcome to the show. let's play a little fed pepper. first of all, what did you think of the fed minutes yesterday? >> i thought they were somewhat confusing. you obviously have fed members that want to continue the qe, you have some that want to stop it and some that want to alter it. i think overall they probably added to the confusion of the market and added to the uncertainty. i'm going to say it was not a good fed minutes and i look for more clarity as the next meeting goes on. >> you know, when i talked to some of my sources, a big fixed income fund managers, the opinion is almost 100% that they don't believe the fed's going to stop, at least for the rest of this year. your thoughts? >> i think the fed will indeed stop sometimes this year. once you get past the sequester and you see what the fallout is and if there is no fallout from the sequester, which is what we think, we tend to think the federal will say, well, why am i at these low rates? why am i continuing to add to
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things? the fed exit strategy is unclear. in fact, we don't think the fed has clue as to how they're going to exit from the $3 trillion or possibly $4 trillion of debt they'll have by the middle or end of this year. that's a real problem. >> you brought up some good points. in terms of the purchases, we could debate that. let's take a step on the other side of the aisle. their holdings, their current position, even if they stop buying, which is open to debate, do you actually think selling off any of those securities is something that's possible in the near future or ever? are they going to just let it run off or is this going to be a point in time, as john taylor thin thinks, where they'll have to do match sales. >> i don't think they'll sell anything in the short term. these guys have as many mortgages as a fannie or freddie
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had in their prime. i don't see the fed doing anything. so they're going to have a huge convexity problem as interest rate goes up. i think they're going to eventually sell but it might be towards the end of this year or the middle of next year and it going to be painful. >> we're out of time. real short answer. would you be in the market to purchase dollar denominated debt from southern europe like that spanish auction yesterday? is that something that appeals to you? >> absolutely not. not at this time. >> all right, thanks, andrew. carl, it's all yours, buddy. >> good stuff, rick. thanks so much. when we come back, sony showing off all of the playstation 4's capabilities at least night's big unveil. why didn't we see the console itself? and tomorrow on "squawk on the street," faber sitting down with meg whitman of hewlett packard. an exclusive interview on the back of earnings. you do not want to miss that. [ male announcer ] i've seen incredible things.
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lower now. julia boorstin is here to tell us why. >> one thing that may be triggering it is it's just as easy to buy twitter ads as facebook ads. in singapore this morning, at a wall street journal conference, eduardo saverin said when you grow to fast, it's hard to iterate, education and sort through all this process to take place. he said there's always mutt many threats to facebook that, we have to remember he has not been involved with facebook since its early days. we spoke to morning star analyst who said people could roll their investments over from phase to google. >> sony introduced its playstation 4 last night.
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it was described as a supercharged pc. it has yet to announce a price for the playstation 4 and the console itself was never shown for the presentation. joining us is ceo of sony america. john, good to have you. i've heard of leave them wanting more but i didn't y nwhy not lot night? >> i can promise you it will be plastic, probably some kind of rectangle. what was really important was to show people what the box could do. >> when does a launch date and pricing become more visible? >> we have several beats, very key events coming up between now and the launch time and nine to ten months is really a long time. the promise is out for holiday 2013 so pre-christmas. >> the "times" today writes it
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up. their lead sentence is for the sony corporation, a tech company also ran, moment of reckoning is here. >> i look forward to proving -- talking about conjecture is the least fun part of the job. proving we have the vision for the industry since we have and entered thetory in 2004. gaming is at the forefront of what we do and our leadership position as well. >> and for the 4, what specifically about it is going to lead that charge? >> some real key points. the most powerful console ever created, five years in the making, designed with the game developer in mind and consumer in mind. you're going to see some of the greatest games ever created. the consumelr will have the ability to sample games before they buy them and more breadth
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of games. >> tell me about the business model behind the console business these days. i think that's one of the big questions. a $600 console, that's what it was when the ps-3 launched years ago, $600 with $60 games still a viable mainstream model in gaming just because the experience is going to be so great? or have things changed? >> i think at the end of the day the gamer remains the same and there are more gamers than before. we have a billion gamers. i think people are willing to pay if they see the value there and i think there's more choice than ever before for consumers. we're going to welcome free to may models, games for 99 cents. the game is on the console and it's that big forum experience that runs up $60 price point. it will give people hours and
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hours of game play on a daily basis for months and years to come. >> so you feel confident that -- sorry. it sounds like you feel confident that the blockbuster game that cost as lot to produce is still the sweet spot where the profit is, not the ipad game or the iphone game that's been gaining a lot of momentum offer the past couple of years? >> i think those are additive experiences. they demystify gaming with a bite-size gaming experience but ultimately people migrate up the food chain. if you consider yourself a true gamer and want the most enriching experiences, you're not going to migrate down the food chain other than to kill some time or complement the gaming experience. >> wayne lapierre has said
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gaming creates violence. what do you say to that? >> the average gamer is about 35 years old now. it's male, it's female, it's old, it's young and there are game offerings of all genres. i think with any decision you have to choose wisely, depending on who the audience is. the influences are out there in society in all shapes and forms. >> do you think games will look different as a result, maybe not this year but two years from now, three years from now in large. >> i think it's going to represent mainstream entertainment and it's going to gravitate toward the things people are interested in. there are supports gamers, there are casual gamers, there are core gamers and their tastes vary differently based on their age and what interests. >> hollywood movies could say the same thing, too. >> exactly. >> jack, congratulations. we look forward to seeing it. please come back. >> thank you. appreciate it. >> looking to free yourself from your mobile service provider's
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monthly data usage fees? what if one company actually rewarded you for all the data you use? it's a "squawk on the street" breakthrough today up after the break. how do you keep an older car running like new? you ask a ford customer. when they tell you that you need your oil changed you got to bring it in. if your tires need to be rotated, you have to get that done as well. jackie, tell me why somebody should bring they're car here to the ford dealership for service instead of any one of those other places out there. they are going to take care of my car because this is where it came from. price is right no problem, they make you feel like you're a family. get a synthetic blend oil change, tire rotation and much more, $29.95 after $10.00 rebate.
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our next guest is trying to reinvent the mobile provider. the more you share, the more freedom you earn in terms of band width.
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good to see you. >> thank you. >> tech crunch reviewed this and called it amazing. walk me through how it works. >> karma is a simple mobile provider. you pay for data as you go and take it with you on a 4g mobile hot spot. >> $69 for the hardware? >> it's $79 for the hardware and $14 per giga byte. the more you share this around you, the more free data you earn. >> you automatically get your first how much is free to start? >> you get 1 giga byte for free and the additional giga byte is $14. that's all the cost there is. >> let's say you go to starbucks to get work done, the object is to get people around you to start sharing this band width, right?
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>> exactly. when you open your wifi, anyone can join. for joining, they get 100 mega bytes for free and you also get 100 mega bytes. the more you share, the more you earn. >> do most users go over that first mega byte? >> a lot of users use it with their tablet, their phone, their laptop. when they're out of their office, their home, they want as fast a connection as they had there. we have a lot of people using quite a lot of mega bytes and giga bytes and that's what karma enables. >> how does the revenue come in? i assume a large number of your users may not buy that additional bulk for $15. >> we sell it on our web site. can you go to yourkarma.com and
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the giga byte is something we've seen really explode. that's where most of our revenue comes from,ng you data, getting connected when it really matters. the 100 mega bytes, that's way for them to taste what the service can be like and how great it is to have. we are very successful at then selling another mega byte because, you know, the service is good. i think we can prove it with that first hundred mega bytes. >> how about privacy concerns? that has to be the first question you get. >> that's a good question. companies like starbucks or mcdonald's, they offer open, free wifi as well. it's so easy for people to connect. you have to worry about is my connection secure. can you look at that in your browser. companies like google or facebook will automatically set that up for you. >> who are you looking to put out of business? is this an attempt to get the bik providers to go away?
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are you just looking to take a little share on the side, a marginal market share bite? what's the object? >> we're really trying to reinvent what a mobile provider can be. and we're working together with existing carriers -- >> because a lot of this is carried through like a clear wire, right? >> exactly. clear wire is our network partner. we work with them to get new customers on to their networks. 90% of all tablets sold are wifi devices. people aren't buying 4g devices anymore. >> i don't think people knew for sure when tablets were first sold whether they would roam. i don't think i've talked to anybody who use it is on the street. >> we enable you using it in the park. that was never possible with a
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w wifi tablet. now it will. >> google in talks to make a stylish set of glasses. if they want to make the glasses have more style they should blank. tweet us your answers and we'll get to that after the break. every car we build [ ] must make adrenaline pump and pulses quicken. ♪ to help you not just to stay alive... but feel alive. the new c-class is no exception. it's a mercedes-benz through and through. see your authorized mercedes-benz dealer for exceptional offers through mercedes-benz financial services.
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tv
Squawk on the Street
CNBC February 21, 2013 9:00am-12:00pm EST

News/Business. Melissa Lee, Carl Quintanilla, David Faber. Opening bell market action. New.

TOPIC FREQUENCY Us 18, China 11, New York 11, Europe 10, Google 9, America 7, Sony 7, California 7, Apple 6, Jim 6, France 6, Rick Santelli 6, New York City 6, U.s. 6, Philly 5, Rick 5, Mexico 5, Nike 5, Carl 5, S&p 5
Network CNBC
Duration 03:00:00
Scanned in San Francisco, CA, USA
Source Comcast Cable
Tuner Virtual Ch. 58 (CNBC)
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